Leading Point

Risk & Regulation

Helping a Tier 1 European investment bank to reduce residual risk in its anti-financial crime (AFC) op model

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The Challenge

A Tier 1 European investment bank was facing huge regulatory pressure to respond to a section 166 letter. The regulators found issues with the bank’s global, regional and local AFC processes, which put the bank under very public scrutiny.
Due to the seriousness of the findings, the bank were facing tight deadlines to remedy these issues.

As well as fighting the immediate fires, the client had very complex legacy systems which needed updating. They were unable to undertake the necessary transformation themselves, due to siloed change teams with no design or architecture skills.

The Ask

We were asked to provide operating model design governance for their anti-financial crime department as part of the AFC Design Authority. It was crucial that we helped the bank prove to the regulators that they were getting their AFC
risk under control.

Leading Point’s expertise in operating models and change, meant that we were well placed to help the bank transform their AFC processes.

The Approach

The AFC target operating model had three key objectives:

  1. Meet the demands of the section 166 letter
  2. Align to the bank’s risk reduction strategy
  3. Provide measurable outcomes

We reviewed and approved the bank’s AFC target operating model. We used a structured approach with our own business design frameworks to link capabilities and processes. It was key that we provided clear op model guidance around design issues, and could prove that the designs complied with AFC design principles. We shaped AFC designs, ensured alignment with AFC business strategy, and assessed designs for compliance with design principles.

We used our own frameworks around capability models and process models to enable consistent governance reviews, tracking, and reporting. We used digital tools to capture the AFC capability model and process models in BPMN. We also provided education and training, ensuring change work streams understood what a design includes and improving their knowledge around AFC controls.

We reviewed and approved the target state designs for controls for mitigating AFC risk:

  1. Name screening
  2. Transaction filtering
  3. Transaction monitoring
  4. Fraud monitoring
  5. Bribery & corruption monitoring
  6. Investigations
  7. Intelligence & analytics

Leading Point went above and beyond what was asked of us. To complement the operating model, we created two bespoke tools to support the AFC’s change team and automate the bank’s manual processes.

Risk Forecasting Tool

This tool helped the bank measure their risk and control effectiveness, and demonstrate improvements over time.

Budget Scenario Tool

This tool clearly showed the impact of various budgeting decisions on the op model.

The Results

Our approach to the AFC operating model and its change over time, delivered an improved posture with regulators. We helped the bank provide assurance to the regulator that the design governance process was under control.

Our sustainable solution for the target operating model enabled rapid analysis and ease of maintenance. We enabled this by ensuring that it linked to policies, risks, controls, issues, systems, and teams.

The Risk Forecasting Tool showed reduction of residual risk over time, through improved control effectiveness, which was invaluable in demonstrating progress to the Skilled Person. The use of the Budget Scenario Tool tool led to the change programme being funded to its fullest extent of over 100m EUR.

million EUR budget spend granted

op model design packages delivered to the Skilled Person

AFC controls assessed against 14 major AFC risk types

AFC capabilities

month engagement